Business Insight Zone

A disclaimer: I am not claiming that Countrywide CEO Angelo Mozilo has done anything illegal with his programmed stock sales. I have no idea whether he’s broken the law or not.

He has, pretty clearly, done something that will win him no new friends among the worried ranks of Countrywide employees who fear that he and his lieutenants are engaged in nothing more than a cynical deck-chair-arranging exercise.

Relevant items:

1. Gretchen Morgenson of the New York Times details the allegations slung in Mozilo’s direction — in this case, from the state treasurer of North Carolina:

Stock Sales by Chief of Lender Questioned

The Securities and Exchange Commission has been asked to investigate stock sales made by Angelo R. Mozilo, chief executive of the mortgage lender Countrywide Financial, in the months before its shares plummeted amid the deepening mortgage crisis.

2. Seth Jayson of The Motley Fool offers a nicely tongue-in-cheek summary of Mozilo’s stock sales.

Mozilo Forced to Dump More Countrywide

[...] On Friday, after market close, Mozilo lived up to the oiliest of Wall Street standards of conduct by trying to drop the hard truth into the news wire while everyone’s ordering drinks. In this little after-hours press release, the Countrywide CEO warns the investing world that, once again, he’ll be dumping shares of his company — just as he’s asking employees to take loyalty oaths.

Not to worry, folks. Poor Angelo has to sell. It’s part of his 10b-5 plan. The fact that he entered into this second stock-exit plan less than a year ago, after he’d already dumped enormous piles of Countrywide, and just as sub-prime was beginning to really crack, well, all that means nothing regarding his opinion for the long-term health of the company he built. [...]

3. This Motley Fool piece that Jayson wrote last week gives more detail or the company’s rightly derided p.r. / damage control / loyalty oath project. The piece ends on the great high note of indignity quoted below:

Countrywide’s Misguided Pride

[..] The problem at Countrywide isn’t a lack of pride; it’s an excess, especially in the boardroom. It seems that Mozilo’s ego won’t let him admit that the party is over. And as the guy who shouted the loudest, and stood on the coffee table with a lampshade on his head the longest, he richly deserves the hangover. The tragedy is that homeowners, employees, and shareholders are suffering the worst of his headache.

I think that if Mozilo had any real pride, he’d plow his hundreds of millions back into the company and promise not to sell a single share until the market was right, and employees and borrowers had security. I won’t hold my breath.

Mozilo has earned the privilege of being derided this way. At least he has his money to keep him warm.